Banks Are Getting Worried About European Commercial Real Estate

money, dollars, raising money

U.S. central bankers are not the only ones concerned about rising commercial real estate valuations — banks are backing away from European real estate as well, deeming it risky.

A new Cushman & Wakefield report said the amount of capital available for property investment around the world fell 2% to $435B, marking the first decline since 2011, Bloomberg reports. Europe led the fall, and for the first time equity for real estate investments in the Americas surpassed equity going to Europe, the Middle East and Africa (EMEA).

Average loan-to-value ratios fell in every region. They decreased the most in EMEA, dropping 4% to 44% while in the Americas they fell 3% to 54% as investors begin to fear the real estate cycle is entering the late stages of maturity.

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